Lookers warns of share suspension amid fraud probe

Shares of troubled Altrincham-based car dealership Lookers plc fell about 20% on Monday after it said it will delay publishing its 2019 financial results for the third time and warned it expects trading in its stock to be temporarily suspended if it fails to publish accounts by June 30.

Lookers also said its auditor Deloitte is to resign.

On June 4, Lookers announced plans to cut 1,500 jobs and close 12 more sites and said a previously disclosed investigation by Grant Thornton into “potentially fraudulent transactions” in its operating divisions was nearing completion.

In a stock exchange statement on Monday, Lookers said: “On 4 June 2020 the company announced that its audited financial statements for year ended 31 December 2019 were expected to be published by the 30 June 2020, subject to the conclusion of banking discussions and the completion of the audit process. 

“The company further announced that the Grant Thornton investigation was nearing its completion and that a draft of the Grant Thornton report had been shared with the company’s auditors, Deloitte LLP, for review in the context of their audit opinion.

“Having discussed the draft report with Deloitte and with that report to be finalised, the company has concluded that the additional procedures that the company and Deloitte will now need to perform in order to finalise the 2019 Results means that it will not be possible to publish the 2019 Results by 30 June 2020. 

“This is the last date permitted for publication of the 2019 Results under the Financial Conduct Authority’s disclosure guidance and transparency rules (as modified by the temporary relief granted to all listed companies by the FCA on 26 March 2020).  

“After consultation with the FCA, if the 2019 results are not published by 30 June 2020 the company anticipates that trading in the company’s shares will be temporarily suspended with effect from 7.00 a.m. on 1 July 2020 until publication of the 2019 results.

“The company’s priority and focus is the production of the 2019 results at the earliest possible date and by no later than the end of August 2020. 

“The board and the company’s finance team is working closely with Deloitte and is developing an action plan to ensure that the additional work required to allow publication of 2019 results is completed as soon as possible.

“Deloitte has indicated to the company that it intends to resign as auditor following the publication of the 2019 results. 

“The company is currently engaged in a competitive tender process to appoint a new auditor.”

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.